Key performance indicators (KPIs) are critical metrics used by a business to understand whether their tasks and performance are tracking successfully to meet its strategic goals. They expose what is working successfully, help to identify areas of needed improvement, and can reveal opportunities for overall process and business improvement.
KPIs are a critical component in companies with field service workers as they enable them to better understand the performance of various lines of business and services offered. This protects the business by providing key components in the evaluation of the ROI of field activities.
"What gets measured gets done" and "if you can’t measure it, you can’t manage it" are just two of the popular sayings used to highlight the critical importance of KPIs. It’s worth nothing that the power of tracking KPIs lies in identifying those that add the most value to your business.
More often than not, managers track every possible metric, drawing attention away from those that actually impact operations. As a consequence, they end up drowning in data while thirsting for insight. This can lead to a paralysis in action or worse yet, taking actions that are costly to the business.
To avoid this situation, a company must first begin by identifying the areas where insight is needed. It’s helpful to remember that the KPIs that are the most actionable and easiest to track may not be the ones that provide the best insight. Understanding what the company’s information needs are and which business questions to ask are the first steps to determining which KPIs to track.
Business questions focus our attention on what actually matters most and therefore, provide guidance for choosing the most meaningful KPIs. For field service-based companies, this would include questions such as:
- What is the time period between jobs being completed and their being invoiced to the customer?
- How often are field engineers missing opportunities to upsell or cross-sell?
- Are there any indications that field engineers do or do not have adequate training so that the business is both reducing job cycle time while also maximizing the customer experience?
- Are we maximizing the number of jobs that can be completed on a daily, weekly or monthly basis, or are there opportunities to improve the scheduling process?
What I’ve learned over the many years of helping companies with their performance management and business intelligence is that there are three key categories of KPIs every business should track. They provide a solid base of knowledge that covers the breadth of business.
In field service companies, these will shine light on the following job and quote performance areas:
- Process – Business process and workflows
- Financial – Management of revenue, recovery of funds, and financial health
- Technician – Personnel utilization, skill level and talent management
In addition, there will be other, more focused indicators designed for your particular business strategy or industry. For example, the average response time that’s expected for a particular type of work will differ from that of another industry. The company’s strategic goals may involve exceeding the industry standard to edge out the competition in this area, so tracking KPIs for this will enable you to know if the business is trending in the right direction.
KPIs offer the best value when they’re focused on robust, value-added metrics. These can be the beginning of an actionable plan that’s centered on the delivery and execution of your business strategy.
Remember – management of business operations is not a numbers game. There’s often a real temptation to capture as much data as possible in an effort to understand a business. This practice is not only inefficient, but it can be a distraction from the KPIs that can make a difference in how a business operates, how customers are serviced and how a business can scale as a whole over time.
Taking the time to ask the right business questions to identify areas that will benefit the most from measurement lays the foundation for successfully meeting strategic goals that will empower for growth for years to come.
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Categories: Business Practices